Replies to post #253057 on Biotech Values

[iwfal]

MRNA spends far too much, says WSJ’s “Heard-on-the-Street” column:

It’s almost everywhere in biotech. The biotech culture created norms on how to operate - but those norms were for an environment with easy money. Eg must have 18 months of cash, but within that pursue as many things as you can with little selectivity (no need to prioritize the high likelihood asset). And then get more money in 18 to 24 months. The result is that even if they obtain infinite money they just spend it faster on assets with ever more questionable value - or on their own personal compensation. RVNC was essentially of this form - great asset. Idiotic grandiose spending and glacially responsive management.

I see a large number of companies with at least one promising asset pursuing this strategy, but they are essentially uninvestible unless new management comes in remove all the crap while they still have adequate runway to produce a wow result.

[DewDiligence]

MRNA—(-17%)—cuts costs, pares pipeline—investors unimpressed:

https://finance.yahoo.com/news/moderna-r-d-day-highlights-100000130.html

Annual R&D expenses, expected to be $4.7B in 2024, will be reduced to $3.6-3.8B by 2027. Cumulatively, R&D expenses during the 2025-2028 period will be reduced by 20%. Such a cutback is apparently too little and too slow to placate investors.

Perhaps more important, MRNA now says it expects to reach break-even cash flow in 2028—two years later then the previous guidance.

Moreover, MRNA issued 2025 revenue guidance of $2.5-3.5B, which is down from the (previously reduced) 2024 guidance of $3.0-3.5B (#msg-174849487).

Please see #msg-175048423 for related info.